Publication Overview

This report reviews Israel’s fixed-line, broadband and mobile sectors, providing market insights and key statistics together with profiles of the major players. Subjects include:

• Market and industry analyses, trends and developments;
• Facts, figures, and statistics;
• Industry and regulatory issues;
• Telecom infrastructure;
• International satellites and submarine fibre optic cables;
• Major players, revenues, subscribers, mobile ARPU
• Fixed broadband (ADSL, cable modem, FTTx);
• Internet, VoIP;
• Digital economy,video streaming, digital media;
• Mobile voice and data markets;
• Next generation mobile (3G UMTS and 4G LTE).

Researcher:- Kylie Wansink
Current publication date:- December 2015 (14th Edition)

Executive Summary

Israel telecoms undergoing major reform

Israel’s telecoms sector is undergoing major transformation due to the recent introduction of new wholesale arrangements for its fixed-line infrastructure. This, combined with the entrance of additional mobile operators a few years ago, has created a much more competitive telecoms environment in Israel.

Israel’s fixed-line wholesale reforms came into effect early in 2015 and have increases competition in the fixed line voice and broadband sectors. Israel’s former Communications Minister approved the reforms in November 2014; allowing other operators to rent infrastructure from major players Bezeq and HOT Telecom and offer fixed services including television, Internet and fixed voice. It was hoped the reforms would reduce prices for customers and remove the need to acquire separate broadband connections and ISP accounts from different providers.

Both Bezeq and HOT Telecom have focused on improving network performance by deploying fibre in access networks, resulting in increasing average download speeds. Unsatisfied with the rate of progress, however, the government undertook to improve the quality of broadband service by establishing a public private partnership tasked with deploying an alternative fibre network. The venture is known as Unlimited.

The introduction of new mobile operators into the Israeli market a few years ago has taken its toll on the three existing operators. In 2015 Israel’s veteran mobile operators – Cellcom, Orange (Partner) and Pelephone continue to lose subscribers and market share to newer market entrants. Cellcom’s and Pelephone’s subscriber bases have been shrinking since 2011, while Orange’s began to decline in 2012. In an effort to turn around its fortunes, Cellcom recently entered the wholesale market and has started offering triple-play bundles. In addition it has launched its own TV services with content accessed by set-top box as well as on handheld mobile devices.

Other factors which have helped drive competition in Israel includes the establishment of full mobile number portability and regulatory barriers that prevent operators from linking sales of handsets to services, or offering discounts to customers that commit to longer periods. Strong competition has led to operators focusing on mobile data and content opportunities as well as on costs, resulting in a number of infrastructure sharing agreements.

Key telecom parameters – 2012; 2015

(Source: BuddeComm based on ITU) 

Key developments:

• Smart phones are very popular in Israel with around 3 million expected to be sold in 2015.
• In November 2015 Cellcom announced that it had entered an agreement to acquire Golan Telecom but it was still subject to government approval.
• In 2015 Cellcom aggressively targeted the TV market launching its own service based on set-top box.
• Cellcom, Pelephone, Orange, Golan Telecom, Hot Mobile, and Marathon Mobile have all won spectrum in a 4G LTE auction conducted in January 2015.
• Following regulatory approval, Partner, Cellcom, and Pelephone have used existing or borrowed spectrum to launch LTE services ahead of the 4G auction.
• The Ministry of Communication has published a network-sharing policy and network sharing agreements have been set up between Partner and HOT Telecom, and between Cellcom and Golan, among others.
• Israel has developed a reputation as being one of the leading technology start-up incubators in the world.

Companies covered in this report:

Bezeq, Hot Telecom, Cellcom, Orange (Partner), Pelephone (Bezeq), HOT Mobile (Hot Telecom), Golan Telecom, Rami Levy, Alon Cellular, Home Cellular, Marathon Mobile/Marathon 018 Xphone, Rounds.